Pork Insight Articles

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Prairie Swine Centre is an affiliate of the University of Saskatchewan


Prairie Swine Centre is grateful for the assistance of the George Morris Centre in developing the economics portion of Pork Insight.

Financial support for the Enterprise Model Project and Pork Insight has been provided by:



Keeping Up With Change

Posted in: Production by admin on January 1, 2004 | No Comments

The role of one farmer has become more and more important in the past 25 years, and the importance will only continue to grow. Three principle forces that drive these changes are economics, consumer demands, and public expectations. As a producer, economically we must focus on cost saving measures, such as properly adjusted water nipples and controlling wastes of feed, medication, and energy. We must also respond quickly to packer grids and feed costs. Consumers today are demanding a safe product with great eating quality, consistency, and predictability. Quality assurance programs are ensuring producers are outputting the best product they can. Public expectations show concern on environmental quality, water utilization, and waste management. We must demonstrate safe practice.

Situation of Pork Production in Quebec

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The pork industry is of great importance to Quebec’s agricultural economy. Since 1981, Canada’s pork production has increased by 82%, with Quebec increasing 56%. Quebec’s contribution to overall Canadian production is shrinking. Considering the environmental difficulties faced in Quebec and the costs associated with it, there is a prediction of very weak growth in Quebec’s pork production. Despite the difficult situation in the hog markets since 2001 and the deterioration of the financial situation of certain producers, it is believed that most operations will survive the current crisis. Financing using debt is still the most often used method of financing. Using equity is interesting because it does not require short-term repayment of the debt but the return is over 15%. Very few agricultural operations can achieve that return. Quebec does not have any venture capital for agriculture, so banking support remains essential. Banks finance agriculture even though it is considered moderate risk. The industry faces a number of challenges, and the quality of pork from Quebec and the rest of Canada are no longer sufficient to ensure a place in the export markets. A better network and the creation of new synergies in the industry are essential to overcoming these challenges. These primary risks include market risk, management risk, production risk, environmental risks, and financial risks. In a period of good profitability it is important to build good working capital and not to overload the enterprise with non-productive investments. In periods of low prices it can be strategically worthwhile to take advantage of certain opportunities that the market offers: the acquisition of an enterprise at a low cost, and expansion projects. Production cost reducing investments and changes to improve performance in the herd should be realized in a depressed market in order to be at full production when prices improve.

2004 Michigan Swine (Farrow to Finish) Business Analysis Summary

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This report summarizes the financial and production records of 12 Michigan, farrow to finish, swine farms. To be included, the farms must have produced at least 50 percent of gross cash farm income from one or a combination of fat hogs, feeder pigs and cull breeding hogs sales. The records came from Michigan State University’s TelFarm project and the Farm Credit Service system in Michigan. The values were pooled into averages for reporting purposes.
Farm records were included if a farm financial summary was completed on 2004 data including beginning and ending balance sheets, plus income and expenses. The data were checked to verify that cash discrepancy was less than 10% of gross cash inflow and that debt discrepancy was less than $1,000. While considerable variation in the data exists, average values are reported in the summary tables below.

Confinement of Livestock

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In the latter part of the twentieth century, animal agriculture underwent a major transition to intensive livestock operations. These operations are more economically viable and provide food at
a lower cost to the consumer. Efficient livestock operations now enable each farmer to feed many more people than in the past.
Many livestock operations achieve efficiency by raising large numbers of animals in smaller spaces.While providing for most of the animals’ needs, some of these confinement production systems restrict their movement. They may also limit the ability of animals to exhibit some normal behaviours.
The Canadian Agri-Food Research Council developed the Recommended Codes of Practices for the Care and
Handling of Livestock. The Codes are based on technical input from producers, animal scientists,
veterinarians, and representatives of the humane movement. These Codes are part of the regulations in The Animal Care Act of Manitoba. As such, they specify the guidelines for livestock production pertaining to the treatment of animals. The Act also outlines the “Duties of the Owner” regarding
responsible animal care. Producers who fail to comply with the Act may be subject to prosecution in Manitoba.

Managing Livestock Mortalities

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Mortalities occur sooner or later in all livestock production. Becuae of the relative numbers involved, large scale operations will have more dead animals requiring disposal than smaller frms. Mortality tends to be greater among some types of livestock such as poultry than other types such as beef cattle. Mass mortality may occur in livestock confined in structures such as barns but less likely to occur among livestock on the range. The regulation requires that mortalities be stored in a secure manner. Mortalities must be stored in a frozen state or kept refridgerated if they cannot be disposed of within 48 hours of death. Many intensive livestock operations have a separate freezer or refridgerated storage for this purpose. Producers who are able to dispose of mortalities within 48 hours of death rely on specially designed, covered steel or heavy duty plastic bins for secure storage.

 
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